Exhibit 10(h)
A G R E E M E N T between
THE XXXXXX CORPORATION
and
DATED: NOVEMBER 25, 1997
AGREEMENT between THE XXXXXX CORPORATION (the "Company") and (the "Executive"),
dated November 25, 1997.
W I T N E S S E T H:
WHEREAS, the Executive is a principal officer of the Company or a subsidiary;
WHEREAS, the Company wishes to encourage continuity of management in the event
of any actual or threatened change of control of the Company; and
WHEREAS, the Executive wishes to be assured of adequate
compensation if the Executive's employment by the Company or a
subsidiary terminates because of a change of control of the Company;
NOW, THEREFORE, the Company and the Executive agree as
follows:
1. Operation of Agreement
1.01 This Agreement will be effective immediately but will be operative only
upon the occurrence of a Change of Control, as defined in Section 1.02, which
takes place during the Protected Period (as defined in Section 1.04 below) and
while the Executive is employed by the Company or a subsidiary.
1.02 A "Change of Control" will be deemed to occur when:
(i) the Company ceases to be required to file reports under Section 13
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or any
successor to that
Section; or
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(ii) any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of either (a) 35% or more of the
outstanding common stock of the Company, or (b) 35% of the outstanding
securities of any other class or classes which individually or together have
the power (other than upon a failure to pay dividends, unless that failure
has occurred) to elect a majority of the members of the Board of Directors
of the Company, except that an acquisition of securities by an employee benefit
plan of the Company or a subsidiary will never be a Change of Control; or
(iii) the Board of Directors of the Company determines that a tender
offer statement filed by any person with the Securities and Exchange Commission
indicates an intention on the part of that person to acquire control of the
Company;
or
(iv) there is a change in the membership of the Board of Directors of
the Company and immediately following the change a majority of the members of
the Board of Directors of the Company are not persons who (a) had been
directors of the Company for at least the preceding 24 consecutive months or
(b) when they initially were elected to the Board, (x) were nominated (if they
were elected by the stockholders) or elected (if they were elected by the
directors) with the affirmative vote of two-thirds of the directors who were
Continuing Directors at the time of the nomination or election by the Board
and
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(y) were not elected as a result of an actual or threatened solicitation of
proxies or consents by a person other than the Board of Directors of the
Company or an agreement intended to avoid or settle such a proxy solicitation
(the directors described in clauses (a) and (b) being "Continuing Directors").
1.03 If there is a Change of Control of the type described
in Section 1.02 (iii), but the tender offer or exchange offer which is
the subject of the tender offer statement does not take place or is
withdrawn without the tendered shares being purchased, upon a
determination by the Board of Directors of the Company that this has
occurred, the Change of Control described in Section 1.02(iii) (but not
any Change of Control of the type described in any other subsection of
Section 1.02), and all rights of the Executive to receive payments under
Section 2.01 or benefits under Section 2.02 upon a subsequent
Termination because of that Change of Control, will be rescinded.
However, rescission of a Change of Control of the type described in
Section 1.02(iii) will not affect the right of the Executive to receive
the payments described in Section 2.01 and the benefits described in
Section 2.02 as a result of a Termination which occurs between the time
the Change of Control takes place and the time it is rescinded.
1.04 For purposes of this Agreement, the "Protected Period"
shall be the three year period commencing November 25, 1997; provided,
however, that the Protected Period shall be automatically extended for
one (1) year on November 25, 2000 and on each November 25 thereafter
unless the Company
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shall have given written notice to the Executive at least ninety (90)
days prior thereto that the Protected Period shall not be so extended;
and provided further, however, that notwithstanding any such notice by
the Company not to extend, the Protected Period shall not end if prior
to the expiration thereof any person (as that term is defined below) has
indicated an intention or taken steps reasonably calculated to effect a
Change in Control, in which event the Protected Period shall end only
after such person publicly announces that it has abandoned all efforts
to effect a Change in Control.
2. Payments
2.01 If there is a Termination, as defined in Section 2.04,
with regard to the Executive, the Company will pay to the Executive
within 20 days after the day on which the Termination occurs, in lieu of
any salary (other than salary for the pay period in which the
Termination occurs and any unpaid salary for prior pay periods), bonus,
severance or similar payments, or damages, to which the Executive might
otherwise be entitled because of the termination under any agreement
with the Company or a subsidiary or any plan or program of the Company
or any subsidiary:
(i) A lump sum equal to (a) the Applicable Factor (defined
below) times the higher of the Executive's annual salary immediately
before the Change of Control and Executive's annual salary immediately
before the Termination, plus (b) the average of the bonus and similar
payments made to the Executive during each of the three full fiscal
years of the Company immediately before the
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fiscal year during which the Termination occurs. For the purposes of
this Agreement, the "Applicable Factor" at any time will be the lesser
of (x) 2.99 or (y) the number of years (to the nearest one-hundredth of
a year) between the date of the Termination and the Executive's 65th
birthday (but not less than one full year).
(ii) A lump sum equal to (and in full satisfaction of the
obligations of the Company with regard to) any unpaid compensation which
had been deferred under any plan or program of the Company or a
subsidiary or any agreement between the Executive and the Company or a
subsidiary,
including all accrued but unpaid interest or sums in lieu of interest as
provided in the plan, program or agreement to the date the lump sum is
paid.
(iii) If, notwithstanding Section 2.03 of this Agreement,
any stock options or stock appreciation rights held by the Executive
expire as a result of the Termination without becoming exercisable, a
lump sum equal to (x) the number of shares as to which the stock options
or stock appreciation rights expired without becoming exercisable, times
(y) (I) the last reported sale price on the date of the Termination of a
share of the Company's common stock (or the other class of securities to
which the stock options or stock appreciation rights relate) in the
principal market in which the common stock (or other class of
securities) is traded (which on the date of this agreement is the
American Stock Exchange with regard to the common stock) or if the
common stock (or other class of securities) is not publicly traded on
the date of the Termination, the fair
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market value of a share of common stock (or of the other class of
securities) of the Company on that date (which, if the Change of Control
involved a tender offer or other payment for shares of common stock (or
securities of the other class), will not be less than the tender offer
price or other per share payment), minus (II) the per share exercise
price of the stock option or stock appreciation right.
2.02 After a Termination occurs, until the earlier of 2.99
years after the date of the Termination and the Executive's 65th
birthday, the Executive will continue to be entitled to all employee
welfare benefits (including
death benefits, disability benefits, and medical and dental benefits)
and indemnification rights, to which the Executive would have been
entitled if the Executive had continued to be employed by the Company or
a subsidiary in the position held by the Executive immediately before
the Termination (but not less than the employee welfare benefits to
which the Executive would have been entitled if the Executive had
continued to be employed by the Company or a subsidiary in the position
held by the Executive immediately before the Change of Control which
resulted in the Termination).
2.03 At the time of a Change of Control, any stock options
and stock appreciation rights held by the Executive will immediately
become exercisable in full, notwithstanding any provisions of the stock
options to the contrary (except that no stock options or stock
appreciation rights will become exercisable earlier than the earliest
date on which they could have been made
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exercisable in accordance with the plan under which they were issued).
This provision will be deemed incorporated in all stock options and
stock appreciation rights held by the Executive, whether granted before
or after the date of this Agreement.
2.04 There will be a "Termination" with regard to the
Executive if and when:
(a) the Company and its subsidiaries terminate the
Executive's employment within 18 months after a Change of Control other
than because of (i) the Executive's death or "total disability," as
defined in the then most current Xxxxxx Staff Handbook, or (ii) the
Executive's conviction of, or plea of no contest to, a felony or a crime
involving moral turpitude or intended to result in gain to or personal
enrichment of the Executive at the Company's expense; or
(b) the Executive terminates the Executive's employment by
the Company and its subsidiaries within 18 months after a Change of
Control for Good Reason. "Good Reason" means the occurrence of any of
the following events without the prior express written consent of the
Executive:
(i) A transfer of the Executive to
a position which has a lesser title or
lesser responsibilities than those of the
position in which the Executive was
employed immediately before the Change of
Control;
(ii) The assignment to the
Executive of duties materially less
significant than those normally associated
with the position held by the Executive;
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(iii) A material adverse change in
(A) the Executive's base salary from that
in effect immediately prior to the Change
of Control or (B) what the Executive must
achieve to qualify for annual bonuses at
least as great as the average annual bonus
the Executive received
during the three full fiscal years of the
Company prior to the fiscal year in which
the Change of Control occurs;
(iv) The failure by the Company to
provide to the Executive (A) material
perquisites, (B) vacation rights, (C)
benefits (including without limitation
service credit for benefits) under
employee benefit and retirement plans, (D)
indemnification for all matters relating
to his or her employment by the Company or
any of its affiliates, or (E)
reimbursement for reasonable expenses
incurred by the Executive in the course of
his or her duties; in each case on a basis
at least as favorable to the Executive as
those to which he or she was entitled
immediately before the Change of Control;
(v) The Company's requiring the
Executive to locate his or her office more
than 100 miles distant from the location
of his or her office immediately prior to
the Change of Control or
requiring the Executive to be absent from
his or her office more than 100 working
days in any year, except in either case,
to the extent consistent with the
Executive's office location changes and
travel before the Change of Control;
(vi) A breach by the Company of any
employment agreement between the Executive
and the Company;
(vii) The liquidation or dissolution of
the Company or the transfer of a majority
of its assets to a transferee which does
not become
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bound by this Agreement as contemplated by
Section 5.04.
Notwithstanding the foregoing, no occurrence will constitute Good Reason
unless (a) at least 30 days before the termination of employment, the
Executive notifies the Company's Board of Directors of the conditions
which the Executive believes constitute Good Reason and states in the
notice that unless those conditions are cured the Executive will
terminate his or her employment with the Company or a subsidiary, but
those conditions are not cured prior to the termination of employment,
and (b) the termination of employment occurs within 60 days after the
Executive learns of the conditions which constitute Good Reason. An
election by the Executive to terminate the Executive's employment under
this Section 2.04(b) will not be deemed a voluntary termination by the
Executive for any purpose.
3. Certain Tax-Related Payments
3.01 If the Executive becomes subject to excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), because any payment made or other thing done under this
Agreement constitutes an "excess parachute payment," as that term is
defined in Section 4999 of the Code, the Company will pay the Executive
not later than 20 days after a demand made by the Executive, cash equal
to the amount necessary to reimburse the Executive for the excise tax
and for all additional Federal, state and local excise, income or
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other taxes which become due, or will become due, because of the
payments under this Section, assuming the Executive pays Federal, state
and local income taxes at the highest marginal rate applicable to
individuals living and working where the Executive lives and works. If
there is a dispute between the Executive and the Company regarding the
amount the Company is required to pay under this Section 3, that dispute
will be resolved by the accounting firm which audited the Company's
financial statements immediately before the Change of Control or another
nationally recognized accounting firm mutually acceptable to the Company
and the Executive.
4. Letter of Credit
4.01 As promptly as practicable after (a) a Change of
Control occurs or (b) someone commences a solicitation of proxies or a
tender offer which, if successful, would result in a Change of Control,
the Company will obtain a letter of credit from a major national or New
York State chartered bank which will expire not earlier than 24 months
after the Change of Control occurs and which provides that the Executive
may, by certifying (i) that a Termination with respect to the Executive
has occurred, and (ii) the amount due to the Executive under Section 2,
draw against the letter of credit the amount stated in the certificate
to be due to the Executive under Section 2. The agreement between the
Company and the bank which issues the letter of credit may specifically
state that the bank will have no responsibility for determining whether
the statements in the certificate from the Executive are correct. If
the
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Executive draws under the letter of credit any sum which is not due to
the Executive under Section 2, promptly on demand from the Company, the
Executive will pay to the Company the sum which is not due to the
Executive plus interest on that sum at 10% per annum from the date the
Executive draws the sum under the letter of credit to the date the
Executive pays the sum over to the Company.
5. General Provisions
5.01 This Agreement will not limit the right of the Company
or the Executive to terminate or alter the terms of the Executive's
employment prior to a Change of Control.
5.02 If the Executive brings suit to enforce any payment
obligation of the Company under this Agreement and a judgment is entered
against the Company, the Executive will be entitled to recover from the
Company, (i) all legal expenses incurred by the Executive in connection
with the suit and (ii) an amount equal to twice the amount which the
Company would otherwise have been required to pay to the Executive
pursuant to Section 2.
5.03 If any provisions of this Agreement are determined to
be invalid, the remaining provisions will remain in full force and
effect to the fullest extent permitted by law.
5.04 This Agreement will be binding upon and inure to the
benefit of the Company and any successor of the Company, including any
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corporation which acquires (by merger, consolidation or otherwise) all
or substantially all the assets of the Company (which successor, after
it acquires all or substantially all the assets of the Company, will be
the "Company" for the purposes of this Agreement). This Agreement will
be binding upon and inure to the benefit of (and be enforceable by) the
Executive and, after the Executive dies or is determined not to be
competent, the Executive's executors or other legal representatives.
5.05 The Executive will be entitled to the payments
specified in Section 2 without regard to whether the Executive seeks or
obtains other employment after a Termination and without reduction for
any compensation received from other employment after the Termination.
5.06 Any notice or other communication under or relating to
this Agreement must be in writing and will be deemed given on the day on
which it is delivered in person or by overnight courier service or sent
by facsimile transmission to the Company at the general facsimile number
at its principal office or to the Executive at a facsimile number
specified by the Executive (with acknowledgment of receipt at the number
to which sent), or on the third business day after the day on which it
is sent from within the United States of America by first class mail,
addressed (i) if to the Company or its Board of Directors, at the
principal offices of the Company, attention General Counsel and (ii) if
to the Executive, to the Executive's office or to the Executive's home
address as shown on the personnel records of the Company, or at such
other
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address as is specified by the Executive to the Company after the date
of this Agreement in the manner provided in this Section.
5.07 This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings with respect to that
subject matter, whether oral or written. This Agreement may be amended
only by a writing signed by the Company, with approval of its Board of
Directors, and the Executive.
5.08 The Company may withhold from payments it is required
to make under this Agreement and from other payments of compensation to
the Executive all sums, including taxes, which the Company determines it
is required by law to withhold because of payments made under this
Agreement.
5.09 This Agreement will be governed by, and construed
under, the laws of the State of New York applicable to contracts made
and to be performed in that state.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year shown on the first page.
THE XXXXXX CORPORATION
By___________________________
Chairman of the Board
______________________________
